Q: I would like to set up a portfolio of approximately $250,000 for my son who is in his mid forties who has zero interest or ability to manage the portfolio. Half the money would be in a TFSA and the other half in a 'cash' account. One possible option is to invest in a number of ETF's along the lines of the MoneySaver, Model Portfolio but not certain that this would be a good option as rebalancing would be required on a regular basis.
The other option that I am considering is to invest in one or more balanced ETF's or mutual funds such as VBAL, VGRO, XBAL, ZBAL, etc, or perhaps MF's such as the TD Balance Index Fund or the CIBC Balanced index Fund.
How would you structure a portfolio that would require little / preferably no maintenance over a long time frame. Thanks
With ETF's such as VBAL, XBAl, are dividends or interest payments reinvested by the 'fund. or is reinvesting of any proceeds necessary?
The other option that I am considering is to invest in one or more balanced ETF's or mutual funds such as VBAL, VGRO, XBAL, ZBAL, etc, or perhaps MF's such as the TD Balance Index Fund or the CIBC Balanced index Fund.
How would you structure a portfolio that would require little / preferably no maintenance over a long time frame. Thanks
With ETF's such as VBAL, XBAl, are dividends or interest payments reinvested by the 'fund. or is reinvesting of any proceeds necessary?
5i Research Answer:
Many brokers have the ability to reinvest dividends but it depends on the broker. Best to check on this with the broker. Many will do 'synthetic' DRIP plans and simply automatically purchase new shares. We would be comfortable with VBAL, at 60% equities and 40% bonds. This ratio is maintained by the managers and will not vary too much. VGRO is more aggressive at 80% stocks. Considering low fees, liquidity, performance and the size of Vanguard, we would be comfortable with either as a one-stop shop.